Animation in CGI is traditional achieved by an artist sitting infront of a computer animating or motion capture. These both work well, but take time and a lot more time to makes alterations.
Endorphin tries to solve this time consuming aspect of animation by using a combination of physics and character intentions (called behaviours) that can be applied to a character to generate realistic movement. So for example if a character falls down some stairs the model can be told to protect a part of their body like his head, try to stop the fall with his hands or just spread his arms around as if he where unconscious.
The Demo Page has some great examples of characters interacting with objects dynamically. Demo seven for example shows how a character can be told to catch a ball simply by selecting the behaviour, the ball and the character's hands because everything in between is generated by Endorphin.
At the mo this isn't applyable for realtime use in games, but as a productivity tool for animators this looks great.